Labor-Greens alliance could backfire

Australia's two party system has been turned on its head after Labor and the Greens forged an alliance designed to convince undecided independents to retain Julia Gillard as Prime Minister.

But the tactic may backfire if the conservative-leaning country independents Bob Katter, Rob Oakeshott and Tony Windsor cannot stomach siding with a Government with entrenched Greens influence.

In a historic agreement that effectively pits the 5.8 million voters who voted Labor or Green on August 21 against the 5.1 million who voted for coalition parties, the Greens have guaranteed backing Ms Gillard for the next three years.

Though the PM insisted the arrangement was not a coalition, Opposition Leader Tony Abbott accused Ms Gillard and Greens Leader Bob Brown of having secretly hatched the deal before the election.

In return for agreeing not to block supply or support motions of no confidence, the Greens will be given unprecedented access to the Prime Minister and Treasurer as well as the resources of Government.

Under the deal, Senator Brown and Greens MP Adam Bandt would meet the PM each sitting week to "discuss and negotiate" legislation. The Greens could also propose new policies for official costing and departmental analysis.

And in what looms as the kiss of death for Ms Gillard's much lampooned election promise to have a "citizens' assembly" of 150 randomly picked Australians to harness community support for a price on carbon, the leaders have instead agreed to establish a Climate Change Committee of experts and parliamentarians.

Mr Abbott said the agreement put the Greens in the "driver's seat" on how a Labor Government would operate.

"What this means is there will be a carbon tax, there will be a higher mining tax, there will be funding cuts for independent schools and there will never be any offshore asylum-seeker processing," he said.

He said the junking of the citizens' assembly demonstrated "the quest for power is the only principle that the Labor Party holds dear".

It came as Treasury reportedly found a shortfall of $4 billion in the coalition's claimed Budget savings of $11.5 billion over four years.

But Ms Gillard said her citizens' assembly wasn't necessarily dead and would be presented to the committee for discussion, adding that "this is a new way of working".

She defended the decision to sign up to a deal with the Greens, arguing that given the numbers in the new Parliament there was little option.

"Mr Abbott if he is honest will say to you too, that in terms of the result of the election campaign getting legislation through the Parliament will require co-operation with other political parties, that's simple mathematics," she said.

Mr Abbott said Senator Brown had thrown a lifeline to the "corrupted" Labor Party.

Tasmanian independent Andrew Wilkie is tipped to make his decision by tomorrow but the three incumbent independents are likely to make their decision next week. They met Treasury and Finance officials yesterday and will hold a series of meetings with ministers and shadow ministers today.

Senator Brown said the Greens would bring "sparkle" to government and were committed to stable, open and good governance.

Mr Bandt said that if a Labor minority Government were formed his priorities would be same sex marriage, ending mandatory detention and offshore processing of asylum seekers.